Tuesday, April 24, 2018

Leland Yeager Has Passed from This Earth

Sad News: Leland Yeager has passed away at the age of 93. David Gordon has a nice brief obituary at Mises.org.

Dr. Yeager taught me graduate macroeconomics (out of Patinkin!) and Money and Banking. He also very kindly recommended me for my position here at Grove City College. While I did not always ultimately agree with him, he taught me a lot of economics as well as a number of nuggets of valuable economic wisdom including:
  1.  The first job of the economist is to get the analysis straight, before discussing whether any policy is politically feasible.
  2. A good economist must be an economist, not an ideologue. We should by social scientists, not cheerleaders.

Friday, March 30, 2018

Austrian Economics as Common Grace

I was blessed to present the Lou Church Memorial Lecture in Economics and Religion at this year's Austrian Economics Research Conference. My lecture was entitled "Austrian Economics as Common Grace." My goal in the lecture was to demonstrate how Austrian economics is one of the blessings God gave to mankind to assist in human flourishing. As such, the Mengerian economic tradition is a manifestation of God’s common grace. Because Austrian, causal-realist economics is a social science that is derived from realistic human action as the cause of all economic phenomena--a foundation that is congruent with the Christian view of man--it can be drawn upon with confidence by those who desire to promote human flourishing. There is no ultimate conflict between Christian doctrine and Austrian economic analysis. You can watch the whole lecture below:

Friday, March 9, 2018

Credible Committments in Columbus

Grove City College Assistant Professor of Economics Caleb Fuller tells the story of J. Irwin Miller, then-CEO of Cummins Engine Company who in 1954 launched the Cummins Foundation which transformed the architecture of Columbus, Indiana. Fuller writes that in 1957, the Foundation

began paying the architectural fees of world-renowned architects should they design a public building in the small town. The result was that between the mid-1950s and the mid-1980s, the town averaged two new architectural masterpieces annually. Today, the town is home to more than 90 buildings and parks designed by internationally renowned architects and attracts some 50,000 tourists annually.
Fuller explains that potential benefits of entrepreneurial commitment.

Friday, January 26, 2018

The Law of Demand Applies to Nutella

. . . Even in France!  In Chapter Five of my book Foundations of Economics I explain that what economists call the Law of Demand is an implication of the Law of Marginal Utility. Because the marginal utility of a good decreases as the quantity we have increases, in order for people to demand a larger quantity, the price must be lower. I write, therefore that the Law of Demand tells us that "there is an inverse relationship between the hypothetical price of a good and the quantity of that good a person will buy."

A manifestation of this law played itself out earlier today in Intermarche stores throughout France. The BBC reports:

Intermarché supermarkets offered a 70% discount on Nutella, bringing the price down from €4.50 (£3.90) to €1.40. But police were called when people began fighting and pushing one another. "They are like animals. A woman had her hair pulled, an elderly lady took a box on her head, another had a bloody hand," one customer told French media. A member of staff at one Intermarché shop in central France told the regional newspaper Le Progrès: "We were trying to get in between the customers but they were pushing us."
Sometimes if the price falls significantly for something people really like, bedlam can ensue. This is what an increase in quantity demanded looks like:

Tuesday, January 23, 2018

Bettina Bien Greaves, RIP

Bettina Bien Greaves has died at age 100. She was an important figure at the Foundation for Economic Education and later a supporter and friend of and contributor to the Ludwig von Mises Institute. She attended Ludwig von Mises's seminars at New York University and became a valuable assistant to Mises for the rest of his life. She also made scholarly contributions of her own, including the important Mises Bibliography.

You can read an important an interview she did for the Austrian Economics Newsletter in 1998 by clicking here.

Monday, November 6, 2017

Herbener Contributes to New Book on the Theory of Costs

My friend and department Chairman Jeff Herbener has a chapter included in the new book The Economic Theory of Costs: Foundations and New Directions edited by Matt McCaffrey and published by Routledge. Herbener's chapter is entitled "Time and the Theory of Cost" The abstract reads as follows:

Production costs in Neoclassical models account for the physical conditions of production (MPP) and consumer demands (MR) but fail to incorporate time across the structure of production. Incorporation of real time in production necessitates the recognition that capitalist-entrepreneurs make production decisions. They discount the MRPs of factors when buying them in advance of selling their output and they must speculate about the DMRPs of factors in the face of uncertainty of the future when deciding what they will pay for them. This chapter develops a theory of cost in light of capitalist-entrepreneurs acting in real time.

It is a joy to work with colleagues who continue to add to our understanding of the laws of economics--laws that declare the glory of the Lord.

Friday, September 22, 2017

Herbener on The Tom Woods Show on The Standard of Living

My friend and Department Chairman, Jeffrey Herbener, was on the Tom Woods Show talking about the American standard of living. Is it falling, and will our children will be worse off than we are? Herbener and Woods talk about it.